Businessweek Archives

Do Bigger Welfare Checks Mean More Kids? Not Really

January 30, 1994

Economic Trends

DO BIGGER WELFARE CHECKS MEAN MORE KIDS? NOT REALLY

The conventional wisdom is that the size of welfare benefits encourages young women to have children out of wedlock. But a recent Urban Institute study by economist Gregory Acs disputes this view. Analyzing the behavior of a nationwide sample of women from age 14 to 16 until they reached 23, he found that education, family, race, and income have a much larger impact on their child-bearing decisions than the generosity of welfare checks.

Acs calculates, for example, that a 19-year-old white high school graduate in a central city who comes from a two-parent family of average means and whose mother was also a high school graduate has a 4.1% chance of having an out-of-wedlock birth. A similar woman from a single-parent family, on the other hand, has a 6.6% chance. By contrast, raising the state's welfare benefit by $100 (about 30% during the period studied) increases the probability in either case by only around 0.1% to 0.2%.

Black women have much higher rates of out-of-wedlock births, but the pattern is basically the same. That is, raising or reducing welfare benefits, by itself, has relatively little effect on their child-bearing behavior--even for women raised in poverty. Moreover, the Urban Institute study finds that single mothers on welfare are no more likely to have another child by age 23 than are other young mothers.

The results, says Acs, suggest that "reducing benefits for mothers on welfare who choose to have additional children is unlikely to have a significant effect on their behavior."GENE KORETZ